FHA Loans Can Help You
![[Photo: The Brewer family smile proudly in front of their new home]](http://www.hud.gov/local/ca/images/hgv-picw-ca-2004-02-27.jpg)
FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.
- Low down payments
- Low closing costs
- Easy credit qualifying
- Limits to FHA Loans are determined by geographical areas
What does FHA have for you?
Qualifying for a home mortgage loan can be difficult, near impossible without a sizable down payment and a moderate credit report. If this describes you and you financial position, an FHA loan may be for you! There are fewer restrictions for FHA loan qualification in comparison to a standard mortgage loan.
Qualifications for an FHA loan are:
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Proven employment status of at least 2 years.
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Steady or increasing income over a 2 year period.
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History of on-time payment. No more than two missed payments on your credit.
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If you've filed for bankruptcy you must wait at least 2 years and have good credit since you filed.
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Those with foreclosures must wait at least 3 years since the most recent foreclosure.
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Monthly mortgage payment should be roughly 30% of your gross income.
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You must pay a minimum of a 3.5% down-payment.
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Agree to 2.25% in closing costs
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Only certain properties are eligible such as single family homes, condominiums, double-wide manufactured homes, modular homes and 2-4 unit properties.
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The property must be your primary residence.
These are the basic qualifications for an FHA loan as you can see FHA loans can be easier to qualify for. To learn more contact us or apply online to get the process started.
Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.
Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan.
Financial help for seniors
Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer "yes" to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.
Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing. We have two loan products – one for those who own the land that the home is on and another for mobile homes that are - or will be - located in mobile home parks.
Ask Korene to tell you more about FHA loan products.
Need help with your downpayment? State and local governments offer programs that can help. Contact Korene to find a program near you that qualifies.
FHA Loan Checklist
When you're applying for an FHA loan the following list of documents will help expedite the process. We can help you understand any part of the FHA loan process so don't hesitate to contact us contact us with any questions.
Employment Info
- Past two years completed tax returns.
- Past two years W-2's, 1099's and any other necessary tax forms.
- One month worth of newest pay stubs.
- Self-employed will need three years tax returns and YTD Profit & Loss Statement.
Savings Info
- Past three months full bank statements for all accounts.
- Any recent statements from investment accounts (retirement, 410k, mutual funds, etc.).
Personal Info
- Driver's License or other official State identification.
- Social Security Card.
- Any Divorce, Palimony, Alimony Documents.
- Green card or work-permit (if applicable).
FHA Loan Benefits
FHA insured mortgages are some of the best kinds of mortgages available. This is because they can help more people into the home buying market. Check out the list below to understand some of the most basic benefits of an FHA mortgage.
Easier to Qualify for - because they're backed by the federal government lenders are more likely to give you the kind of loan that you need.
Low Down Payment - FHA insured mortgages only require a 3.5% down-payment which makes it easier for people to own homes. Additionally the 3.5% can come in the form of gifts, unlike many other loan programs.
Lower Credit Borrowers Qualify - because FHA insured loans are backed by the government those with a poor credit history have an easier time getting this kind of loan.
Better Interest Rates - with the backing of the government these loans typically have a better interest rate than most traditional mortgage loans.
Better Home Stability - the FHA has programs designed to help homeowners keep their homes during hard times. The will work with you to help your home from falling into foreclosure. Always try to work out problems with your lender before the situation becomes dire.
Now is the time to Buy! You may Never See Housing Prices or Rates This Low Again!
FHA Loans
HUD announced a series of changes that are aimed at strengthening the troubled FHA Mutual Mortgage Insurance Fund.
The steps include:
• Consolidation of FHA’s Home Equity Conversion Mortgage (Reverse Mortgage) options;
• An additional 10 basis-point increase in FHA mortgage insurance premiums;
• Requiring borrowers to pay annual mortgage insurance premiums for the life of the loan;
• Requiring lenders to manually underwrite loans for which borrowers have a decision credit score below 620 and a total debt-to-income ratio greater than 43 percent;
• A proposed increased down payment requirement for mortgages with original principal balances above $625,500;
• Increased enforcement efforts for FHA-approved lenders regarding “aggressive” marketing to borrowers with previous foreclosures.